Q: Peter & Team, I think we do have a problem at CRH and it has to do with the minority interests (MI's) in that they are getting way too much of the business, possibly because of mix or maybe the joint ventures are the better operations.
$000
Earnings
Q1 '17 Q1 '16
Net Income $3302 $ 3031
Att. to CRH 1542 2956
Att. to MI's 1760 75
CRH net income down almost 50%. How is it possible that the MI's can be getting more of the profit than CRH shareholders?
and
Cash flow
Cash flow provided 7991 5524
Paid to MI's 4011 627
Share to MI's 50% 11%
Cash paid to the MI's is more than their share of the profits.
Year ago this was not an issue. Now it is!
What should we do here? The business as a whole looks fabulous, it is in a good space with strong and meaningful secular tailwinds, it has a huge 35% conversion of sales to cash flow, but something looks very wrong with the business model and the sharing of the cash and profits.
Kindly advise. Thank you. Keith
$000
Earnings
Q1 '17 Q1 '16
Net Income $3302 $ 3031
Att. to CRH 1542 2956
Att. to MI's 1760 75
CRH net income down almost 50%. How is it possible that the MI's can be getting more of the profit than CRH shareholders?
and
Cash flow
Cash flow provided 7991 5524
Paid to MI's 4011 627
Share to MI's 50% 11%
Cash paid to the MI's is more than their share of the profits.
Year ago this was not an issue. Now it is!
What should we do here? The business as a whole looks fabulous, it is in a good space with strong and meaningful secular tailwinds, it has a huge 35% conversion of sales to cash flow, but something looks very wrong with the business model and the sharing of the cash and profits.
Kindly advise. Thank you. Keith
